Purchases in India, where the company already operates, are also on the agenda, Sidi-Said says in Dubai. He aims to improve the provision of generic drugs, especially injectable ones, in areas where the treatments are not reimbursed.
“We are in this business because complex pharmaceuticals are very poorly genericised,” he says. “The molecules are in the public domain but not enough effort is being put into generics. We want to be in the market where the expense is out-of-pocket and where people can afford it.”
Kelix Bio is a pharmaceutical platform set up in 2020 by founding investors Development Partners International (DPI), CDC Group of the UK and the European Bank for Reconstruction and Development (EBRD). The company was created by combining Egyptian generic drugs manufacturer Adwia Pharmaceuticals with Indian oncology and critical care specialist Celon Laboratories, and aims to broaden pharmaceutical access in African and India.
CDC is the largest shareholder with 40%, with the EBRD and DPI each holding 30%. Kelix recently closed a fundraising of $200m from shareholders and has raised a total of $450m to date.
African governments aiming to expand healthcare provision with limited spending power are under pressure to maximise the use of generic treatments. Algeria encourages generic substitution, and under South African law, it is mandatory for pharmacists to offer patients a generic substitute if it exists.
- Fitch Solutions has argued that the policy means that growth in generic drugs will outstrip patented sales in South Africa in coming years.
- The share of patented South African drugs is forecast to fall from 56.7% in 2020 to around 45% by 2030, Fitch says.
Stock Market Listing
Part of the newly raised $200m will be used for the acquisition of Pharmaceutical Institute (PHI), a manufacturing and distribution company in Morocco. Set up in 1989, PHI is an established player in a national market where $2bn of pharmaceutical products are consumed per year. About 70% of the newly raised $200m will be used to pay for PHI, as well as for capital expenditure on the company.
Sidi-Said is a former country managing director at Pfizer, and has since held a string of pharmaceutical CEO roles. Spending on PHI will leave “some dry powder” which will be increased by a further fundraising of about $300m, he says. He is hopeful that shareholders may be willing to supply more capital. “We believe there is an opportunity to go beyond” the $300m figure, he says.
- The funds raised will be in the form of equity. Kelix Bio is debt-free and “we like to keep it this ways,” Sidi-Said says.
- He aims to raise the funds towards the end of this year.
- About 60% of Kelix sales are injectable treatments, and that proportion is likely to keep increasing, he adds.
The ultimate plan is a stock market listing, with the London stock exchange front of mind as a possible destination. The company is open to other jurisdictions, Sidi-Said says. He hopes to be able to list the company at the start of 2025.
Bottom Line
Kelix Bio believes emerging-market consumers are increasingly willing and able to pay for a higher quality of generic drugs.
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